Finance Minister Purbaya Expresses Guilt Over Regional Revenue-Sharing Cuts

Finance Minister Purbaya Yudhi Sadewa has expressed that he feels a sense of guilt for implementing cuts to the Revenue Sharing Funds (DBH) which are the entitlement of local governments.

DBH refers to funds sourced from State Budget (APBN) revenues allocated to regions based on specific percentages. Types of DBH include Land and Building Tax, Tobacco Excise (CHT), Income Tax (PPh), Land and Building Transfer Duty (BPHTB), as well as revenue sharing from oil and gas, forestry, and coal mining.

As is widely known, Purbaya implemented a reduction in DBH of up to 69.5% in the 2026 State Budget. Purbaya stated that he was merely continuing the legacy of his predecessor.

“First, when I became Finance Minister, I asked, is it even permissible to cut the DBH?” he stated during a Working Meeting with the Regional Representative Council (DPD RI) on Monday (22/06/2026).

According to Purbaya, his team informed him that DBH reductions are permissible under the Law on Financial Relations between the Central Government and Regional Governments (UU HKPD).

“People told me it is possible under the UU HKPD and depends on the state’s financial condition. However, I still feel a sense of guilt towards the regions,” said Purbaya.

Consequently, he has opened up phased payments for DBH this year. Purbaya also presented the possibility of increasing Transfers to Regions (TKD) by up to Rp90 trillion next year.

“Next year, there is a temporary increase in TKD of approximately Rp40 trillion, but the range could rise by up to Rp90 trillion depending on the APBN discussions. Therefore, that space remains open,” Purbaya remarked.

Purbaya emphasised that such an increase depends on the 2027 State Budget discussions with the House of Representatives (DPR RI). Furthermore, he reaffirmed his focus on maintaining fiscal discipline with a deficit below 3%.

Previously, the Ministry of Finance reported that the realisation of transfers to regions (TKD) reached Rp306.1 trillion as of 31 May, equivalent to 44.2% of this year’s State Budget (APBN) ceiling of Rp693 trillion.

“The TKD we have disbursed is Rp306.1 trillion, or 37.1% of the APBN ceiling,” said Finance Minister Purbaya Yudhi Sadewa during a press conference for the June 2026 APBN KITA edition in Jakarta, Friday (05/06/2026).

The 2026 TKD itself has decreased compared to the TKD ceiling in the 2025 State Budget, which stood at Rp919.9 trillion.